Wall Street is shocked by the epidemic. One of Chinas important financial data remains unchanged

category:Finance
 Wall Street is shocked by the epidemic. One of Chinas important financial data remains unchanged


According to common sense, RMB exchange rate reflects the situation of market supply and demand, and fundamentally reflects the economic fundamentals of a country. But the United States has long suspected China of manipulating its currency to support exports of Chinese goods. On August 5, 2019, the US Treasury suddenly listed China as a currency manipulator, which surprised the international community.

The reporter noted that in the two-year Sino US trade war, the focus of international public opinion gradually shifted from the field of trade to the field of Sino US financial market, which was regarded as another battlefield of Sino US competition. However, the exchange rate of RMB is believed by some American viewpoints to be a powerful weapon for China to evade us tariff. The U.S. Treasury simply labeled China as a currency manipulator in its report on August 5, 2019. This is the first time in 25 years that the U.S. has identified China as a currency manipulator, and this will give the U.S. government the power to further enhance the tariffs on China.

However, China has repeatedly reiterated that it has not manipulated the RMB exchange rate. What China has implemented is a managed floating exchange rate system based on market supply and demand, which is regulated by reference to a basket of currencies. In terms of mechanism, the RMB exchange rate is determined by market supply and demand.

Half a year later, the United States suddenly turned. On January 14, 2020, the U.S. Treasury released a semi annual report on exchange rate policy, which cancelled the recognition of Chinas exchange rate manipulator. On January 16, 2020, China announced the specific contents of the first phase of the trade agreement between China and the United States, indicating that China and the United States should strictly abide by international regulations in exchange rate policy and supervise each other. Strict rules make it impossible for China to manipulate its exchange rate.

As mentioned in the chapter on exchange rate issues and transparency in the agreement, China and the United States should realize and maintain the exchange rate system determined by the market, avoid competitive devaluation and use of exchange rate for competitive purposes, including large-scale, continuous and one-way intervention in the foreign exchange market.

In addition, the content of exchange rate transparency stipulates that both parties shall disclose the relevant monthly foreign exchange reserves and forward position data, as well as the sub item data of the balance of payments financial account every quarter, including direct investment, securities investment and other investment (loans and receivables); and the evaluation of our exchange rate. In case of problems in exchange rate policy and transparency, the implementation mechanism stipulates that the US side can strictly supervise Chinas macroeconomic and exchange rate policies, data transparency and reporting

Wan Zhe, chief economist of China Gold Group, said in an interview with the global times that the RMB exchange rate remained stable because of Chinas strong control over the epidemic and various departments policies to avoid the impact of the epidemic on the economy. However, Wan believes that the trend of RMB exchange rate can lengthen the time to see the performance of Chinas economy in a longer period of time.

On February 22, Liu Guoqiang, deputy governor of the peoples Bank of China, said that the current market generally believed that the impact of the epidemic on the economy was a short-term impact, and the foreign exchange market could repair itself after a short-term impact. In the long run, the trend of the exchange rate depends on the economic fundamentals. The fundamentals of Chinas long-term economic growth remain unchanged, the foreign exchange reserves are sufficient, and the interest margin between the domestic and foreign currencies is still in the appropriate range. All these provide the fundamental support for the RMB exchange rate. In the past month, according to Bloomberg, the yuan has ranked seventh among the 31 most active currencies in trading. According to data compiled by Bloomberg, the trade weighted exchange rate of RMB has been basically flat since the end of January. Bloomberg analysis said the reason for the stability of the RMB exchange rate is that the Chinese government seems to have successfully controlled the spread of the epidemic, judging from only nine newly confirmed cases reported outside Hubei Province on Monday. According to the data of CICC, the pace of Chinas resumption of production is accelerating, and the operating rate has slightly exceeded 50%. Bloomberg believes that another reason for the stability of the RMB is that due to the epidemic, the number of Chinese people traveling abroad has decreased, eliminating an important negative pressure on the RMB. Source: Global Times - global network editor in charge: Yang Bin Gu nf4368

On February 22, Liu Guoqiang, deputy governor of the peoples Bank of China, said that the current market generally believed that the impact of the epidemic on the economy was a short-term impact, and the foreign exchange market could repair itself after a short-term impact. In the long run, the trend of the exchange rate depends on the economic fundamentals. The fundamentals of Chinas long-term economic growth remain unchanged, the foreign exchange reserves are sufficient, and the interest margin between the domestic and foreign currencies is still in the appropriate range. All these provide the fundamental support for the RMB exchange rate.

In the past month, according to Bloomberg, the yuan has ranked seventh among the 31 most active currencies in trading. According to data compiled by Bloomberg, the trade weighted exchange rate of RMB has been basically flat since the end of January.

Bloomberg analysis said the reason for the stability of the RMB exchange rate is that the Chinese government seems to have successfully controlled the spread of the epidemic, judging from only nine newly confirmed cases reported outside Hubei Province on Monday. According to the data of CICC, the pace of Chinas resumption of production is accelerating, and the operating rate has slightly exceeded 50%. Bloomberg believes that another reason for the stability of the RMB is that due to the epidemic, the number of Chinese people traveling abroad has decreased, eliminating an important negative pressure on the RMB.